Researcher: Energy shock threatens Europe

The Iran war could lead to a big shock in the energy market, says Institute of Foreign Policy senior researcher Toni Alaranta.

The price of Brent reference oil has risen to 80 dollars per barrel on Tuesday. As recently as last December, the price hovered around $60.

Iran has threatened to close the narrow Strait of Hormuz, a key route for the transportation of oil and natural gas.

“The Revolutionary Guard has announced that they will close this strait, that is, formally. In practice, that means that they would probably fire on ships that try to pass through,” Alaranta reflected on Talousaamu’s live broadcast.

JPMorgan predicts that if the transports really stop in the Strait of Hormuz, the price of oil could move up to USD 100-120 per barrel in three weeks.

Qatar, an important liquefied natural gas producer for Europe, has announced that it has suspended LNG production.

How big a shock can this still be in the energy market?

“Yes, here the chips are in the direction that there could be a big shock. This is difficult for Europe anyway, when we have finally started to get rid of Russian energy”, Alaranta reflected.

“Now there are some worrying signs that this won’t be over very quickly.”

Could the shock even be of the same level as at the beginning of the Russian war of aggression?

“This is difficult to predict, but it is by no means impossible.”